Are There More Acquisitions to Come From Google?

by Sam Dean - Oct. 14, 2011Comments (1)

If you look up and down the block you live on, you may very well see unemployed people, foreclosures and continuing signs that the economy is in a sinkhole, but don't tell that to Google. Yesterday, the company reported very strong earnings and revenues, and CEO Larry Page chose the word "gangbusters" to describe the company's trajectory. Google reported quarterly earnings fof $2.73 billion, up from $2.17 billion a year ago. Revenues were $9.72 billion, up from $7.29 billion a year ago.

That's a lot of money but it's also worth noting that Google now has $42.6 billion dollars in the bank. In all likelihood, we'll see some of that heading toward further acquisitions.

Of course, the news of Google's $12.5 billion play for Motorola is old now, but many people are questioning whether new CEO Larry Page has his mind on more buyouts. His company certainly has the money for them.

Talkin' Cloud suggests that Google might go on a cloud services binge:

"Will Google CEO Larry Page open the vault and send Google out on a cloud services shopping spree?"

Such a move could make a lot of sense. There are many interesting cloud-focused startups around that wouldn't be all that expensive for Google to buy, and that would accentuate applications that Google has in the cloud, Chromebooks, Chrome OS, Google's data centers, and much more.

On his earnings call, Page said that Google is seeing "a huge positive revenue impact from mobile," and--especially given its play with Motorola--more mobile acquisitions could be coming. Page also said that Google will be spending more on "capital expenditures," which could refer to data center costs or any number of other expenses.

Microsoft, like Google, took only a few years to amass a giant war chest, and some have criticized the company for not making shrewder acquisitions over the years. In fact, Microsoft might have been able to buy Google once upon a time, and certainly had a good shot at acquiring Yahoo in order to compete with Google.

It's unlikely that Google's leaders have missed the lesson there, and the Google money train shows no sign of slowing down. It's entirely likely that we'll soon see more purchases from the company.

Of course, this may also be good news for open source. Following the acquisitions of Sun Microsystems and Novell, Red Hat and Google are the only public, U.S. companies with business models focused heavily on open source technology. They're both doing very well with those models, too--a lesson for many other technology companies.